LVMH, full name Moët Hennessy Louis Vuitton, is the world’s largest luxury goods group, with more than 75 well-known brands covering many fields such as wine, fashion, jewelry, and cosmetics. The company was formed in 1987 from the merger of two French companies, Louis Vuitton and Moët Hennessy, both of which have a long and rich history in the luxury goods industry. LVMH’s market capitalization exceeded US$500 billion in 2023, becoming the first European company to reach this milestone. Behind LVMH is a business wizard named Bernard Arnault. He is the chairman and CEO of LVMH and one of the richest people in the world, competing with Tesla’s Elon Musk and Amazon’s Jeff Bezos for the top spot on the wealth list. How did he do all this? Today we will discuss the rise of the LVMH empire and the business legend of Bernard Arnault.
Bernard Arnault was born on March 5, 1949, the son of a wealthy family in Roubaix, France. His father, Jean Arnault, was an industrialist who ran a construction company. Bernard Arnault has shown interest in art and business since he was a child. He likes to play the piano and also likes to read books on economics and management. After completing secondary school at the lycée Maxence Van der Meersch de Roubaix, he studied engineering at the Ecole Polytechnique in Paris, graduating with honors.
In 1971, Bernard Arnault returned to the family business and persuaded his father to sell the company’s construction business for 40 million francs and switch to real estate business. In 1972, Arnault founded his first company, Ferinel, with determination and an unwavering belief in his abilities. Specializing in real estate development, the company quickly gained attention for its innovative approach and attention to detail. In 1974, he was appointed construction manager of the company, became chairman three years later, and succeeded his father in taking over the company the following year. Just two years after the company was founded, Ferinel has achieved impressive success, with revenues soaring to an impressive 50 million francs. In 1981, he expanded the company’s business to the United States and established Ferinel Inc. While the company continued to thrive, Arnault’s entrepreneurial spirit craved new challenges. In 1984, he made a bold decision that would change the course of his life and the luxury industry forever.
In 1984, Bernard Arnault encountered his first big opportunity. At the time, the French government was looking for buyers to sell its holdings in a bankrupt textile and retail group called Boussac. Boussac owns a fashion company called Christian Dior, which Arnault has always dreamed of. He successfully persuaded the French government to sell Boussac to him for 60 million francs, a price well below its actual value. This strategic acquisition marks Arnault’s entry into the luxury sector. Bernard Arnault subsequently reorganized the Boussac Group’s business. He sold almost all the company’s assets and laid off 9,000 workers within two years, retaining only the Christian Dior brand and Le Bon Marché department store. By 1987, the company was profitable again, with a revenue stream of $1.9 billion. The investment ultimately proved to be a wise one, as the Dior brand took on new life under Arnault’s leadership and later became a shining star of the LVMH empire.
In 1987, Arnault saw another opportunity. At that time, two companies, Louis Vuitton and Moët Hennessy, were merging to form LVMH. However, a power struggle emerged within the merged company. When the stock market crashed in October 1987, the market value of LVMH Group shrank by 40%. Arnault took a bold step and collected LVMH shares at extremely low prices. In 1988, Arnault spent US$600 million to increase his 13.5% stake in LVMH, becoming LVMH’s largest shareholder.
In July 1988, Arnault acquired the French fashion brand Céline. The acquisition of this brand is an important strategic move for LVMH, because it not only enriches the company’s product line, but also provides strong support for its market share in the luxury fashion field.
In January 1989, Arnault spent another US$500 million to obtain control of a total of 43.5% of the shares and 35% of the voting rights of the LVMH Group. He successfully gained control of the company and became Chairman and CEO.
Arnault believes that LVMH’s luxury brands have a long history. If other luxury brands are purchased, the group’s brand effect can be used to further develop and expand the group’s scale.
Over the next few years, Arnault began a series of acquisitions.
In 1989, LVMH acquired Givenchy for approximately US$380 million.
In 1993, LVMH successfully acquired two well-known brands, namely Berluti and Kenzo. Berluti is a French leather manufacturer that produces men’s clothing, shoes, belts, bags and ready-to-wear. Kenzo is a French luxury fashion brand. This acquisition marks LVMH’s further expansion and consolidation in the fashion industry, adding to its dominance in the luxury goods field.
In 1994, LVMH acquired Guerlain, a long-established and prestigious perfume company, for approximately $500 million. The acquisition not only adds a sought-after luxury brand to LVMH, but also strengthens its position in the fragrance and beauty sectors. With LVMH’s strong resources and market influence, Guerlain has been able to further expand its business globally and maintain its leading position in the luxury fragrance market.
In 1996, LVMH acquired Loewe and Celine. These two acquisitions further consolidate LVMH’s position in the luxury goods industry and provide important opportunities for it to expand its product portfolio and market share.
In 1998, LVMH acquired three important brands: Sephora, Marc Jacobs and Duty Free Shoppers. Sephora is a well-known beauty retail chain. The acquisition of Sephora provides LVMH with an important opportunity to enter the beauty market. The specific amount of this acquisition is said to be around several billion dollars, which shows LVMH’s ambition and strength in the beauty industry. Marc Jacobs, the eponymous brand of a highly regarded fashion designer and one of the iconic brands in the fashion industry. This acquisition further enriches LVMH’s product portfolio in the fashion field and strengthens its position in the global fashion market. Duty Free Shoppers (DFS) is a world-renowned duty-free shop chain group that provides travelers with a variety of luxury goods and merchandise. LVMH acquired DFS for approximately US$2 billion. This acquisition not only allowed LVMH to further expand its influence in the travel retail market, but also strengthened its global leadership position in the luxury goods industry. These acquisitions are strategic moves for LVMH, consolidating its leading position in the luxury goods and fashion industries and laying a solid foundation for future development.
1999 was a year of dynamism and growth for LVMH as they successfully acquired several well-known brands, including Krug, TAG Heuer, Chaumet, Make Up For Ever, Benefit and Zenith. The first is Krug, a prestigious Champagne house. This acquisition further enriches LVMH’s product line in the wine industry and strengthens its position in the luxury wine market. Followed by TAG Heuer, a world-famous wiss watch manufacturer, this acquisition further consolidates LVMH’s position in the luxury watch industry and provides an important opportunity for its expansion in the high-end watch market. Next is Chaumet, a luxury jewelry brand with a long history. This acquisition enriches LVMH’s product portfolio in the jewelry field and strengthens its competitiveness in the luxury jewelry market. In addition, LVMH also acquired cosmetics brands Make Up For Ever, Benefit and watch brand Zenith. These acquisitions further expanded LVMH’s product portfolio and consolidated its leading position in the luxury goods industry. These acquisitions reflect LVMH’s strategy of continuous expansion and diversification, laying a solid foundation for the company’s growth in global markets and further consolidating its leadership position in the luxury goods industry.
2000 was a year of expansion and diversification for LVMH. They successfully acquired well-known brands such as Pucci, Rossimoda and Starboard Cruise Services. Pucci is a prestigious Italian fashion brand. This acquisition further enriches LVMH’s fashion brand portfolio and strengthens its position in the luxury fashion field. Rossimoda is an Italian high-end footwear manufacturer. This acquisition provides LVMH with an important opportunity to enter the luxury footwear market and enriches its product line in the fashion field. Starboard Cruise Services is a well-known company that provides duty-free shopping services, providing cruise passengers with a variety of luxury goods and merchandise. The acquisition strengthens LVMH’s position in the travel retail market and provides it with important opportunities to expand its market share. These acquisitions further demonstrate LVMH’s global expansion strategy, laying a solid foundation for the company’s diversified development in different fields and consolidating its leading position in the luxury goods industry.
In 2001, LVMH acquired two important brands: Fendi and Acqua di Parma. Fendi is an Italian luxury fashion brand that LVMH acquired for billions of dollars, further enriching its fashion brand portfolio. Acqua di Parma is a prestigious Italian perfume brand. LVMH acquired the brand and provided important support for its business expansion in the field of beauty and perfume.
In 2002, LVMH acquired Belvedere Vodka, a vodka brand with an international reputation. This acquisition further consolidates LVMH’s position in the wine industry and enriches its product portfolio.
In 2004, LVMH acquired the Scotch whiskey brands Ardbeg and Glenmorangie. It enriches LVMH’s product portfolio in the alcohol industry and strengthens its position in the whiskey market.
In 2007, LVMH acquired Les Echos, a well-known French economic newspaper. It further expanded LVMH’s territory in the media industry and provided important support for its development in the field of business news.
In 2008, LVMH acquired Swiss luxury watch brand Hublot. This further enriches LVMH’s product portfolio in the luxury sector and strengthens its position in the high-end watch market.
In 2010, LVMH acquired Moynat, a French traditional high-end handbag brand. It adds a new member to LVMH’s product portfolio in the field of luxury leather goods and further consolidates its position in the fashion luxury market.
In 2013, LVMH acquired well-known brands such as Nicholas Kirkwood, Loro Piana and Cova. Nicholas Kirkwood is the eponymous brand of a highly regarded British fashion footwear designer. Loro Piana is a prestigious Italian brand of luxury wool products and fine fabrics. Cova is an Italian pastry shop with a long history. These acquisitions further enriched LVMH’s product portfolio in the fields of fashion, luxury goods and food, and enhanced the company’s market influence.
In 2015, LVMH acquired Repossi and Le Parisien. Repossi is a French high-end jewelry brand. Le Parisien is a well-known French newspaper. This acquisition further expands LVMH’s business footprint in the jewelry and media fields.
In 2016, LVMH acquired the German luxury luggage brand Rimowa.
In 2018, LVMH acquired French fashion brand Patou.
In 2019, LVMH acquired Fenty and Belmond. Fenty is a fashion brand founded by Rihanna. Belmond is a luxury hotel and resort operator.
In 2021, LVMH acquired Tiffany, a prestigious American luxury jewelry brand, for US$15.8 billion. Considered the largest luxury brand acquisition in history, this is also LVMH’s largest acquisition to date. This acquisition strengthens LVMH’s position in the global luxury jewelry market and further consolidates its leadership in the fashion industry.
In 2022, LVMH acquired Pedemonte Group, a well-known Italian fashion company.
The above are just some of LVMH’s acquisitions. Over time, LVMH continued to grow and expand into more markets. Each acquisition is a reflection of Arnault’s business acumen and decisive decision-making, and is carried out with precise strategies and shrewd negotiation skills. It enables LVMH’s brand portfolio to continue to expand, and it also achieves synergies and cooperation, promotes innovation and growth, and will LVMH ascended to new heights and captivated consumers around the world. In the process, Arnault himself became a legend in the business world, and his name became almost synonymous with the luxury goods industry.
Through these acquisitions, LVMH has experienced impressive revenue growth and established itself as a giant in the luxury goods industry. The company’s revenue has increased from €1.4 billion in 1988 to more than €53.7 billion in 2023, demonstrating the successful integration and management of these well-known brands.
Under Arnault’s leadership, LVMH’s revenue and profits have grown significantly. His strategy is to maintain the independence and uniqueness of each brand while leveraging the group’s scale and resources to drive efficiencies. He also emphasized innovation and quality, insisting on producing only the highest grade products.
In 2023, LVMH’s market value exceeded US$500 billion, becoming the first European company to reach this milestone. And Bernard Arnault also became one of the richest people in the world. His success story is one of vision, determination and business acumen, but also a story of what it takes to succeed in the highly competitive luxury industry.